Are you wondering what the tax filing deadlines are for October 2016? Would you like tips on year-end business tax savings?
October 2016 Tax Filing Reminders
- October 17
Deadline for filing your 2015 individual tax return if you requested an automatic six-month extension of the April deadline.
- October 17
If you converted a regular IRA to a Roth in 2015 and now want to switch back to a regular IRA, this is the deadline to do so without penalty.
- October 17
This is the last day to fund your Keogh or SEP plans if you requested an extension of time to file your tax return.
Plan Ahead for Year-end Business Tax Savings
As the end of the year approaches, turn your attention to ways you can reduce your 2016 tax liability.
Here are suggestions.
- Business equipment.
Take advantage of end-of-year sales on business equipment. For 2016, a maximum Section 179 deduction of $500,000 and 50% bonus depreciation are generally available for qualified property placed in service anytime during the year. Be aware that special limits apply to vehicles.
- Business trips
When you travel to wrap up year-end business deals, you can write off your expenses – including airfare, lodging, and 50% of the cost of meals – if the primary motive of the trip is business-related. Costs attributable to personal side trips are nondeductible. If you travel by car, deduct actual business-related auto costs or a flat rate of 54 cents per mile (plus tolls and parking fees).
- Entertainment and meals
Generally, you can deduct 50% of the cost of entertainment and meals that precede or follow a “substantial business discussion.” For example, you might treat a client to dinner and drinks after completing a contract earlier in the day. In this case, you can include 50% of the expenses for the client and yourself, as well as for spouses and significant others.
- Company outings
Generally, deductions for business entertainment and meals are limited to 50% of the cost. However, if you throw a company-wide holiday party before year-end, you might be able
to deduct 100% of the cost when you meet certain requirements, such as inviting your entire staff.
- Hire your child
Does your teenaged child want a job to help pay for holiday gifts? If you hire your child, reasonable wages paid for actual services rendered are deductible, the same as wages of other employees. The wages will be taxable to your child at your child’s tax rate, which may be lower than your rate or that of your business.
- Job credits
When your business hires workers from certain “targeted groups,” such as veterans and food stamp recipients, you may be able to claim the Work Opportunity Tax Credit. The maximum credit is generally $2,400 per qualified worker.
If you have questions about October’s tax filing deadlines or need help, please contact us today.